VanEck Chip ETF Tumbles as Broadcom’s $1.2 Billion Forecast Gap and Firm Jobs Data Cool the AI Rally

The VanEck Semiconductor ETF lost 7.5% in a week as Broadcom's AI revenue miss and strong jobs data hit chip stocks, but long-term AI infrastructure spending outlook stays bullish.

The VanEck Semiconductor UCITS ETF has been one of the most explosive bets on the artificial-intelligence boom, but the past week delivered a brutal reality check. The fund shed roughly 7.5% in five sessions, sliding to €102.00 from a 52-week high of €110.84 reached just days earlier on June 22. That 8% peak-to-trough retreat marks the sharpest pullback in months for the €8 billion vehicle, which still sports a staggering 155% gain over the trailing twelve months.

The trigger came from two sides of the same coin. Broadcom’s quarterly report left the market cold when management guided for third-quarter AI-related revenue of $16 billion, roughly $1.2 billion shy of the $17.2 billion analysts had penciled in. The reaction was immediate and vicious. Broadcom shares cratered in early June, and the broader PHLX Semiconductor Index suffered a 10% single-day plunge on June 5 — its worst session since March 2020. An estimated $1.3 trillion in market capitalization evaporated across the sector in that single trading day.

The fallout rippled well beyond U.S. borders. South Korea’s Kospi index slid 10%, driven by a 12%-plus rout in both SK Hynix and Samsung. European heavyweights such as ASMI and STMicroelectronics also took hits, while U.S. names Intel, Micron and AMD all joined the sell-off. Even Nvidia, the undisputed chip-market leader, gave back ground.

Compounding the company-specific shock was a macroeconomic headwind. The latest U.S. jobs report came in far hotter than expected, dampening hopes that the Federal Reserve would begin cutting interest rates anytime soon. For highly valued technology stocks, a higher-for-longer rate environment is toxic: it mechanically reduces the present value of future earnings. The message from the labour market effectively poured cold water on the reflation trade that had lifted semiconductor equities to their recent highs.

The VanEck ETF’s composition made it especially vulnerable. It tracks the MarketVector US Listed Semiconductor 10% Capped Screened Index, with individual holdings capped at 10%. Its top positions — Taiwan Semiconductor Manufacturing, ASML, Nvidia and Broadcom itself — are precisely the names that took the hardest blows. AMD shed 5.23% during the week, TSMC 2.94% and Nvidia 1.05%, dragging the fund lower.

Yet the long-term narrative remains largely intact. The semiconductor industry is on track to post global annual sales of $975 billion in 2026, according to Deloitte, with roughly half that figure coming from AI chips. Hyperscalers have earmarked a combined $750 billion for AI infrastructure next year. TSMC, the fund’s largest single holding, reported a 30% year-on-year revenue jump in May, and Morgan Stanley expects the Taiwanese foundry’s advanced packaging capacity to reach 200,000 wafers per month by 2027, with Nvidia as the lead customer. Meanwhile, AMD addressed its memory bottlenecks by acquiring MEXT, a storage-optimisation specialist — a move that sent its shares up 7% in the 24 hours after the announcement.

Technically, the correction has brought the ETF back from overbought territory. The relative strength index now stands at a neutral 54.4. Still, the fund trades about 12% above its 50-day moving average of €90.97 and a full 58% above its 200-day average, underscoring how extended the rally had become. The 30-day annualised volatility of 55.8% reflects a sector that remains highly sensitive to news flow.

Looking ahead, the index’s semi-annual rebalancing is on the horizon. Given the wide divergence in individual stock performance over recent weeks — some names have held up better than others — the portfolio weights could shift noticeably. Beyond that, the next major catalyst is the July earnings season from the sector’s heavyweights. If the demand for AI infrastructure continues to accelerate, this setback may prove to be exactly what many analysts have been calling for: a healthy consolidation. But for now, investors are nursing a 7.5% weekly wound.